Hong Kong millennials are skirting the law to avoid sky-high rent

Young people are illegally living in industrial buildings, putting their health and safety at risk

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With the median home costing 19.4 times more than median annual pre-tax household income, millennials in Hong Kong are taking desperate measures to continue living in a city where a now-demolished neighborhood had a density of well over 1 million people per square kilometer.

According to a report by Bloomberg, Hong Kong millennials have begun to illegally squat in industrial buildings where they risk their health and safety in favor of more affordable rents.

“The rents nowadays are very unreasonable,”32-year-old photographer Wah Lee told Bloomberg. “There’s no way for me to afford those residential units.”

Lee lives in a 1,000 square-foot unit located in an industrial building where a Chinese herbal-oil company and a commercial kitchen are his neighbors. The photographer says he rents the space out for HK$11,000 per month (US$1,400), which is less than half of what a residential unit would cost in the same area.

In a nine-minute video published this month, Vox reporter Johnny Harris explained that price growth in Hong Kong, unlike in the American cities of New York and San Francisco, isn’t driven by a lack of building space. Instead, it’s driven by outdated land use laws that keep 75.6 percent of non-built-up areas from being used, two housing experts told Harris.

“No,” one expert said. “The problem isn’t a shortage of land. The problem is bad land management.”

The government, which owns all of the land in Hong Kong except for the land where St. John’s Cathedral sits, is currently reviewing 18 options to revise land use laws in a way that would create more supply, thereby taming home prices and rents.

The options include short-to-medium term solutions where private agricultural land reserves in new territories or brownfield sites could be redeveloped for residential use. Medium-to-long term solutions (10–30 years) include near-shore reclamation outside Victoria Harbour and developing caverns and underground space. Lastly, the government listed eight conceptual solutions that have no distinct timeline.

None of the options include re-zoning industrial buildings for residential use and, in fact, the Hong Kong government is working to create criminal penalties for industrial building owners and tenants that could go in effect as soon as October, according to Bloomberg. Currently, tenants are only at risk of being evicted if government inspectors find them.

In the meantime, millennials are still choosing to deal with unreliable water and electricity sources, fire hazards and the possibility of criminal convictions.

“It’s more comfortable to live around people in a residential area,” said Ting Li, who pays HK$5,000 (US$636) for a 200-square-foot industrial apartment. “I used to wake up and hear chirping of birds, now I only hear people coming into their offices.”

“I have looked into other places in residential areas, but they are too expensive,” she told Bloomberg.

Email Marian McPherson.